Human Flashcards
Disney as a TNC?
In 2006, Disney’s income was $32 billion
Disney is a new economy brand – based more on creativity, finance, media and finance but not the production of goods
How do companies grow?
Expansion - popularity of its product
Merger - Takes over its rivals
Diversifying - Companies take over others which do not sell similar products
Positives of Disney as a TNC?
Disney operates a just-in-time system where it can judge a success of a film before investing in its merchandise and will outsource its manufacturers, demand quick delivery times and will not have to own expensive factories or production lines – this ensures very profitable products
Employs 130,000 directly and 40,000 suppliers indirectly across 50 countries
Negatives of Disney as a TNC?
Disney’s cheap outsourcing still means that workers can be paid very low wages, in 2006 Bangladeshi workers were paid $0.15 for every $17.99 shirt they sewed, the factory was later closed and the workers went without compensation
In 2007 toys manufactured in China were recalled after they were found to contain dangerous levels of lead in their paint.
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How does Disney contribute to cultural Globalisation?
- ‘Mulan’ was used to gain access to China
- ‘Hunchback of Notre Dame’ launched to re-brand Disneyland Paris
- ‘The Lion King’ aimed at Africa
- ‘Aladdin’ aimed at the Middle East
- ‘Finding Nemo’ aimed at Australia
- Disney spreads into global markets yet its characters remain Americanised, causing a spread of the American culture around the world
‘Disneyfication’?
- Disney-themed fast food outlets
- Resort tourism with everything on site
- The French government paid $2 billion towards EuroDisney providing 30,000 jobs
What is globalisation?
The process by which people, their cultures, money, goods and information can be transferred between countries with few or no barriers
Causes of globalisation?
Decreased Cost of communication Reduced time lapse of information transmission (From morse code to Internet) Increase in technology TNCs Transport (Boeing A380 853 passengers)
Financial impacts of globalisation?
TNCs now have higher incomes than the GDPs of some countries
Trillions of dollars are exchanged electronically daily
Worldwide reduction in consumer prices
Political impacts of globalisation?
Companies such as News International influence how people think and vote
Political organisations such as EU spread political control through multiple countries
Loss of national identity
TNCs gain control over governments
Impacts of globalisation on people?
People with skills in demand such as IT, finance and management move around the world to where they are needed or want to live
Migrant labour moves to places of higher wages
Cultural impacts of globalisation?
‘Americanisation’
‘Global village’
Music, TV and media spread Western culture
Colonialism examples?
British Empire – Britain would colonise areas, create free trade between them, buy raw materials, produce products in its own factories and then sell back its products to the countries for higher prices. (Core and Periphery theory)
After the Second World War America sent aid to many countries to stop the spread of communism, this made them dependent on aid but grew their economies rapidly. These countries included: Japan, Singapore, South Korea, Taiwan and Mexico.
What is a core?
Owns 80% of global goods and services
Earns highest incomes
25% of population
What is the periphery?
Owns and consumes 20% of global goods
Has 75% of global population
2.5 billion people live with less than $2 a day
What does colonialism do?
Switches on an area
Trade bloc examples?
NAFTA - Canada, USA, Mexico
EU
Global trade group examples?
WTO (World Trade Organisation)
OECD (30 wealthiest countries)
OPEC (Organisation of Petroleum Exporting Countries
Africa’s debt crisis?
1970s – OPEC raised the price of oil
OPEC countries banked their earnings in Western Banks
The banks lent this money to developing countries for huge infrastructure projects
1980’s – Global interest rates doubled
Developing nations became crippled by debt
The IMF created a Structural Adjustment Package (SAP) to make the payments more affordable – the governments had to reduce spending in their countries however
Without IMF approval, no debtor country could get further credit. SAPs became compulsory.
The African countries mostly cut funding to healthcare and education as part of the SAP agreements – this mostly impacted the poorest people.
Debt crisis and Zambia?
- Zambia used to be rich from copper – produced 25% of its GDP
- 1990’s price of copper fell due to fibre-optic cables
- GDP fell in Zambia and its debt became the amount of 2 and ¼ of its GDP
- The government had to cut spending on healthcare and education
TNCs scale of control?
Account for 25% of worlds economic activity
Employ 1% of total workforce
In 2006 Exxon Mobil made a higher profit than the GDP of Saudi Arabia
How do TNCs grow?
Motive - Capitalist ideology leads to desire for profit
Horizontal integration - Buying up the competition (Ford bought Jaguar, Volvo and Landrover to spread to European markets)
Vertical integration - Owning all stages of production (Exxon Mobil owns its oil wells, tankers, refineries and pumping stations
Economies of Scale - Expand production to increase efficiency and reduce production costs (Buy in bulk - Tesco)
Mobility of TNCs growth?
Accelerated and cheaper transport - larger container ships
Accelerated communications - Fibre Optics
Production technology - ‘Just in time’